bannière

Holding Company

Establishing a Holding Company

  • Derived from a Plc, Ltd, or a foundation
  • Caters to companies with stakes in other companies without having any commercial operations of their own

 

What is a Holding Company?

A Holding Company is not a legal status, but a tax status. This status may also be claimed by a public limited company (Plc), a limited liability company (Ltd), or even a foundation.

Therefore, a Holding Company is a capital company (Plc or Ltd) or a foundation that mainly has stakes in other companies without having any commercial operations of its own.

Conditions for obtaining a Holding status

The conditions for having the status of Holding are the same everywhere:

  • The activity of the holding company (management of long term equity investments) is registered to the company (status and registration with the Registre du Commerce).
  • The purpose of the holding company must actually be accomplished, meaning that the holding mainly holds stakes in other companies (shares or equity) or foundations. Holding shares in itself does not count as holding shares in partnerships. With “disseminated” shareholdings (several small stakes in various companies), and/or if shares are bought to be resold quickly, the conditions are also not met.
  • In the long term, 2/3 of balance sheet assets must consist of held shares. An alternative is that 2/3 of revenues come from held shares.
  • The company has no commercial activity in Switzerland, or only very minor activity. Asset management (investment of liquid funds), general cost items (taxes, computing, credit management of subsidiaries), as well as commercial activities abroad may be accepted. The management of a commercial or industrial business is not permitted.

Holding Company Taxation

A holding company pays no taxes on revenue at the cantonal level and benefits from a reduced tax rate on capital. At the federal level, tax is normally collected at a rate of 8.5%. However, it can be reduced with the reduction system for holding shares. In itself, revenues from investments are untaxed revenues.

A Holding Company is not a legal status, but a tax status. This status may also be claimed by a public limited company (Plc), a limited liability company (Ltd), or even a foundation.